“This AD Contains AI”: The Future of Fashion Advertising
Introduction
Imagine you are scrolling through instagram and come across an advertisement for denim jeans. The jeans look real, the model looks real and you are about to add the jeans to your cart when you see a disclosure “this advertisement contains a synthetic performer.” Does this change how you look at the jeans? Will you still buy them? These are the questions that fashion companies will have to think about in light of new legislation creating mandatory disclosures for businesses using synthetic AI performers.
On September 16, 2026, California signed Senate bill 1050 which will go into effect January 1, 2027. The bill applies to all corporations and aims to increase consumer transparency and regulate AI by requiring companies to disclose when they use AI performers in advertising. While not an outright goal of the emerging AI disclosure laws, fashion brands may reduce their use of AI in advertising as a result of the Senate Bill in order to avoid a negative response by consumers. This is because the world of fashion is a consumer driven industry, and the way in which brands handle AI will come down to how consumers respond to AI advertising.
Pre-Existing Law
The new California bill comes on the heels of a similar law in New York which took effect in June of 2026. Dubbed the Synthetic Performer Advertising law, it aims to protect consumers by mandating transparency between brands and their use of AI through clear disclosures. However, it is important to note that prior to the new CA and NY laws, consumer protections still existed both in federal and state law. FTC Act § 5 prohibits unfair or deceptive acts or practices, requiring advertisements to be truthful and not misleading. Additionally, California Unfair Competition Law, Bus. & Prof. Code § 17200 and California false-advertising law, § 17500, already prohibited false and misleading advertising long before SB 1050 was signed. The problem however with existing consumer protection laws is they focused on the potential of advertisements to deceive consumers rather than requiring transparency upfront.
Public Reception to AI Advertising
The CA and NY AI disclosure laws have developed in response to real life controversies surrounding emerging AI in advertising. In 2023, Levi’s partnered with Lalaland.ai to use fashion models in advertising campaigns to achieve diversity. This was met with consumer backlash surrounding the use of artificial models instead of using real world examples of diversity to market Levi’s products. Consumer reaction was similar when fashion brand Mango chose to use AI models in 2024 and Toys R Us used OpenAI’s Sora feature to create a short film.
Most notably, in August 2025 Vogue published a Guess campaign that featured AI models. The campaign received a negative response via social media users who criticized the lack of diversity in addition to Guess taking away jobs from real life models and promoting unrealistic beauty standards through AI. While the Guess, Levi, Toys R Us and Mango advertisements all took place before the adoption of CA and NY disclosure laws, the public opinion was clear. Once it is revealed that an advertisement is AI, consumers then are forced to face controversies surrounding AI such as employment, diversity and transparency concerns, all which place a negative light on the advertisement.
What this Means for the Future of Fashion Advertising
Since recent history has shown that consumers respond negatively to advertisements that employ AI, how will disclosure laws affect brands going forward? The new laws in CA and NY have been clear that their creation is an effort to protect consumers but also to change advertising norms by increasing transparency and protecting human creative labor. However, as a consumer driven industry, the success of fashion brands is dependent on the response consumers have to marketing and brand reputation. If disclosing AI is a surefire way to induce negative public opinion, will these laws actually have an unintended effect of decreasing AI use in advertising?
As AI becomes more prevalent, more states are likely to adopt similar laws to CA and NY with the potential for federal regulations to come in the future. With required disclosures becoming the norm, brands will be faced with the issue of whether to risk consumer backlash with the use of AI, or to stick to traditional advertising methods to uphold brand loyalty. It’s this balancing act that may lead to fashion brands steering away from AI out of fear of losing potential customers. The fashion industry is reliant on the power of reputation, from luxury goods to brand identifying trademarks and logos, advertising is essential to the success of fashion. While there are countless opportunities for brands to use AI in fashion, such as the use of AI models, generated commercials and AI imagery of products, the positive benefits of these uses may be outweighed by customers' reactions to mandatory AI disclaimers. When it comes down to it, if the customer shopping online is interested in buying a new pair of jeans that is all that matters. If the customer hesitates to purchase after seeing “this advertisement contains a synthetic performer” then the advertisement failed at its initial purpose, to induce customers to buy the product.
Conclusion
As AI continues to grow and affect every aspect of both the legal and business industries, lawmakers will continue to try and keep up by enacting regulations. The recent legislation in both CA and NY is an example of the likely future of how AI is treated in regards to consumer protection law. Ultimately, the new laws may have a much larger impact than just increasing transparency between companies and consumers, it may affect how consumers interact with advertising altogether. Brands in the fashion world will have to balance the potential advantages of AI, such as cost, efficiency and resources, with the consumer response and trust of their customer. As a result, fashion advertising may see a decrease in AI use if brands choose not to risk losing customer loyalty. While this is a difficult choice for companies, the issue will only grow in the future as states adopt AI regulations that require disclosures of synthetic performers.
*The views expressed in this article do not represent the views of Santa Clara University.
Comments